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Given the following capital budget for a proposed machine, what would

you recommend that Builtrite do? Builtrite’s cost of capital is 12%.

Initial investment $150,000

RATCF Year 1 45,000

RATCF Year 2 65,000

RATCF Year 3 75,000

Terminal CF 25,000

45,000 65,000 100,000

150,000

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